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A stock price is currently $30.00.You have determined that at the end of four months the stock price will be either $25.00or $36.00. The risk-free

A stock price is currently $30.00.You have determined that at the end of four months the stock price will be either $25.00or $36.00. The risk-free interest rate is 3% per annum with continuous compounding. What is the value of a four-month European put option with a strike price of $32.00? Use no-arbitrage arguments in establishing the option price.

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